Most people know that scholarships are gift aid, or money that you don't have to pay back. If that's all you know about scholarships, however, then keep reading!

Scholarships are a type of merit-based aid. Most scholarships spotlight academic achievement but some are available for a variety of talents and situations. For example, you can receive a scholarship for athletic accomplishments, for pursuing a program of study, for writing a moving essay, for being a child of a veteran, etc. (Many scholarships do have a need-based component as well.)

Where Does This Money Come From?

There's a romantic notion that a number of scholarships go unclaimed, and the enterprising student who uncovers them will be handsomely rewarded. Not true. Most of the scholarships awarded to students come from the schools they respectively attend. This means that a student wins a scholarship from Duke and collects that money when she enrolls in Duke. If she decides to enroll in Michigan State, she obviously cannot collect an award from Duke.

There are, of course, outside organizations that sponsor scholarships such as the Dell Scholars Program, the Coca-Cola Scholars and the Sallie Mae Fund. Usually, these can be applied to any school of your choosing.

Don't fool yourself - the competition for these awards is intense!

When You Win, Know What You're Getting

If you win a full scholarship, you have good reason to celebrate! But you are not completely off the hook. A full scholarship will most likely only cover the cost of tuition. This is great, but it won't cover the entire cost of attendance (COA). The COA includes room and board, insurance, transportation, the cost of books and other fees.

A comprehensive scholarship, on the other hand, covers the entire cost of attendance.

I Won This Year - How About Next Year?

A non-renewable scholarship is wonderful, but it's a one-time award. You won't see that credit on your bill next year. Renewable scholarships can continue for subsequent years, usually when a student meets certain conditions like maintaining a certain GPA.

If you win a renewable scholarship, know exactly what you must do to continue receiving the money!

Scholarships Are Needles in a Haystack

Finding scholarships that you qualify for is just as difficult as earning one from a pool of competitors. Apply to every scholarship for which you're eligible. Don't count on a scholarship paying for your entire education. It happens, but to the smallest percent of college-bound students.

Read more about Searching for Scholarships.

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